Pakistan is losing Rs. 227 billion annual tax revenue as 10 million liters of Iranian petrol and diesel enter Pakistan per day through land and sea routes, according to a joint report by intelligence agencies.
The report has detected the involvement of individuals from law enforcement agencies and 533 illegal petrol stations nationwide, along with 105 smugglers of Iranian oil using unfrequented routes to bring in the fuel, reported a national daily.
Smuggled petroleum products are coming in mainly via Makran and Rakhshan divisions before being sold at unauthorized roadside outlets. Despite crackdowns, the smuggling persists, with daily volumes reaching 8.9 million liters since the February 8 General Elections.
The report highlights the intricate network facilitating smuggling and payments made in various currencies. Unfortunately, roughly 2.2-2.4 million people in Balochistan rely on this illicit trade for their livelihoods, particularly in areas with limited economic opportunities.
In April 2024, the Oil Companies Advisory Council (OCAC) complained about the smuggled products in a letter to the Special Investment Facilitation Council (SIFC).
OCAC lamented that oil marketing companies (OMCs) like PSO and Shell are experiencing reduced consumption and incurring monthly losses of $35.6 million, which is also hurting government tax revenue.
The association called for immediate intervention to safeguard the energy security and economic stability of the country.
Editorial & Legal Practice Group
Authored and reviewed by the corporate law and tax litigation practice group at Javid Law Associates. Our team comprises High Court advocates, corporate legal advisors, and authorized tax practitioners across Pakistan.
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Jurisdiction: Pakistan